Organizational Structure of Singapore Airlines - Case Study Example

Practical Research and Application: Singapore Airlines Practical Research and Application: Singapore Airlines Introduction Singapore Airlines is originally a merger between Malaysia and Singapore Airlines. The airline started operating as a single entity in 1972. The history of the company goes back to 1947 when it operated as a merger. The company then had three flights per week, flying to Ipoh, Kuala Lumpur and Penang. The operational routes slowly increased to cover an international recognition in terms of Singapore flights operating through the Kallang Airport. The split between the two companies took place after Malaysia became a Federation in 1963. The spilt made it easier for the company to make decisions, and implement innovative schemes, increasing its popularity. Today the airline covers over 90 destinations in 38 countries. The success of the company has not been easy and is dependent on various factors including regular research programs, and diverse organizational structure (SingaporeAirlines 2012). Organizational Structure of Singapore Airlines An organizational structure is a grouping among individuals of a company with the aim of securing coordination amongst themselves. The aim of an organization structure is to secure a target of achieving a given goal. The importance of an organizational structure is to provide guidance in the running activities pertaining discipline and hierarchical order. The organization gives a distinction on the duties and responsibilities of different people elevating their potential. Singapore airlines operate as one of the biggest in terms of turnover as well as diversity in the airline industry. The centralized, hierarchical organizational structure of the airlines plays an important role in ensuring the company’s management merges with the Singapore governments. Elements within its organizational structure play a role in flexible decisions that aid the organization in succeeding (Becker & Baloff 1969; Carol 2001). Elements of Singapore’s organizational structure i. Organization Complexity The Singapore Airline currently runs with 2000 pilots, 7000 cabin crew leaders and 200 staff on the ground. The airline involves in corporate social responsibility through communicating with people who they offer transport services. Providing environmental protection and social welfare remains a vital role in securing a good public image. The company indulges in forecasting and research to secure a brighter future by improving their services. Singapore Airlines adopts emerging technologies in the aviation industry. It became the first company in the world to operate the largest aircraft in the world. The A380 plane flew the route between Singapore and Sydney in 2007 (Halbert & Ingulli 2011). ii. The Centralization of the Structure Singapore airlines operate as a sole entity regardless of the government shares. The government of Singapore maintains a strict relationship of financing the airline without placing restrictions on the operation of the airline. The company runs with the help of vice presidents assigned to run the organization properly. Theoretically, the firm has a centralized structure but this comes with no evidence (Hitt, Miller & Colella 2006; Cunningham & Philip 2000). iii. Forming the Organizational Structure The process involves the management of Singapore airlines setting rules and regulations that puts restrictions on its members. The airline maintains a vigil structure that allows flexibility, making the employees comfortable in their working environment. The employees subject to working conditions that allow for changes in the regulations set provided they bring favor to the organization. This has increased the productivity levels of the organizations, helping the organization to attain operational growth (Kolb, Gorelik & Mugnaioli 2010). Existing Dimensions in the Organizational Structure Organizational structures exist in six types suitable for companies as they pass through different phases of growth. The first phase of operation requires the organization to adopt a simple structure. The company adopts a more complex structure in future to deal with different organizations. Singapore airline is a mature company that runs under a hierarchical organizational structure. The company does not adopt a single organizational structure but combines the Professional and machine bureaucracy structures. The operations of the structure provide strict company mottos in providing the idealistic structure while managing the organization. The human resource of the organization seeks to employ only specialized people to the organization. This is to assist the aviation company through set projects aimed at improving the external and internal operations of the organization (Nguyen 2007; Hooper & Greenall 2005). Singapore’s Organizational Structure Determinants The main determinant of the organizational structure of Singapore Airlines is the organizational goals. Organizational goals assist the company to runs towards meeting set objectives. The goals give motivation to the employees by avoiding a chaotic environment while conducting business. Singapore Airline ensures the set goals aid the management to knowing the exact strategies appropriate in acquiring the goals. Planning the organizational goals in the aviation industry secures an efficient and effective manner in running the organization. Singapore Airline bases its goal setting on to factors, the means focus and the ends focus. The natures of the goals keep on changing depending on the needs of the organization. Singapore’s airline main goal is to provide its employees with a stable and pioneer position in the line of operation (Parsons 2008). The company embraces new technology, which aids in securing the use of new techniques and devices. It is evident as in 2007; Singapore Airline became the first to run the largest commercial aircraft between Sydney and Singapore. The operations of the airline grew to run the planes in Hong Kong and Paris. Research and analysis is a major goal in securing the growth of the organization. Tastes and preferences of organizations keep on changing. The airline ensures consumer satisfaction by changing its services to meet the preferences of the customers. The aviation industry bonds well with the hospitality industry. The industry ensures enhanced services in the entertainment services, food provisions and other in-flight government. It is to this reason that the company enjoys a large clientele of customers. The company also ensures an addition of fleets on a regular basis to increase the number of people using their flights to travel (Perez 2007). Effectiveness of the Organizational Structure to Singapore Airline Judging the effectiveness of the organization is through various approaches. These approaches include the systems approach, goal attainment approach, balance scorecard approach and the strategic constituents approach. The systems approach applies use of scarce resources to accomplish organizational goals. The approach applies if the inputs and outputs of the company link. The approach comes with an advantage of choosing the types of targets required to reach the set goals. Goal attainment approach works with the goals of the organization to provide a definitive path of attaining the goals. The goals are measured with respect to the organizations capability (Rainey 2009). The approach is an advantage to the organization in that it provides a straightforward specific to the organization. The balance scorecard approach analyses the comparisons of the large and small-scale activities. It assists the organization in setting long-term analysis of the organization. The approach assists the organization in directing employees towards gaining a given goal. Using this approach requires patients as it deals with long term goals. The benefit of the approach is in evaluating the financial plan o the organization while comparing it to others before running the organization goals. Singapore airlines work to achieve the interest of its consumers by setting long-term achievements of the organization. This is through application of all the approaches in line with the business operation (Schein 2004). PEST analysis of Singapore Airlines The main departments in Singapore airlines include administration, finance, customer service, marketing and human resource department. To enhance the principle of unity between the departments, Singapore airlines work through analysis of PEST analysis. The administration of the Singapore airlines ensures that the coordination between the other departments runs smoothly. Analysis of the external environment of Singapore airlines comes with analysis of the PEST analysis of the environment. Political, economical, social and technological environment determine the environment of the organization. The political environment indicates a shortage of political environment in the surplus production of services in the airline industry. The move leads Singapore to increase comparative advantage applies in businesses, but when it comes to doing business across the borders, a nation considers more than one business. Comparative advantage and absolute advantage are two different aspects. The comparison between the absolute advantage of Singapore Airlines and its competitors remain comparative. Singapore Airlines can then focus on producing products that they are far much better in producing. The two economies hence grow through interaction and exposure in doing business. Comparative and absolute advantage plays an important role in regulating product production across boundaries. The limit to which a company retracts production depends on the goods and services in question. A company remains in comparative and absolute advantage if the regulation of production maintains (Weisel 2002). The economical environment deals with changes in elasticity of the operational price. The transport industry experiences changes in terms of elastic and inelastic demand. The transport industry in the past ten years has faced structural changes with the change in demand. The move leads to the maintenance of demand and supply balance. The changes in demand bring about elasticity in the demand of transport in different areas. Transport is the one of the products, which experiences both elastic and inelastic demand at any given period. The price of transport experiences inelastic demand as its price can change without a drop in its demand. Working in the transport industries requires a constant supply as it does not have a complementary (Becker & Baloff 1969). Individuals will purchase the products no matter how much the price goes up. Transport also faces elastic demand as if its price goes up; clients may reduce its purchase. It is common to find individuals avoiding the use of their cars due to the increasing costs of transport and its products. The problem is not that transport does not exist; it is because it is a growing economic resource hence countries use power to manage the resource. Demand and supply cannot respond instantly to the changes in price, it becomes necessary to estimate an average time of reaction. Changes in the price of a product depend on its availability and resource power of its retrieval (Rainey 2009). Social environment of the Singapore airline deals with solutions to global imbalances in the airline economy. The amount of production does not take the consumers into a surplus purchasing mode. The airline economy seeks to increase the production transport while pointing out surpluses in the Asian economy. The global economy ensures customer experience through analysis of consumer surplus and producers experience producer surplus mainly through the transport industry. Relating consumer surplus with the economy of transport production is a direct one. Consumers are willing to pay extra for transport and it keeps on rising. Producers also go through producer surplus as a producer receives transport in amounts least for the given good. Transport producers get surpluses bigger in China (Nguyen 2007). Technological advancements come on a daily basis. The advancement of technology by offering booking tickets and online customer care services elevates customer relationship management. Indications on communications through technology decrease the number of customers. The forecast IMF forecasts on a surplus of about 6% of the GDP. The competition of transport from the Middle East transport exporters comes with increase in surpluses of transport production. Transport is a resource, which depletes easily hence will be on demand by many countries. The increase in transport prices represents distribution of income from individuals who purchase transport and those who produce the transport. Consumer and producer surpluses occur during past periods of high prices of extraction that last long. During this period transport, producers get extra revenues to prove a more durable standard. The transport market future expects transport to remain expensive as though the price of travelling is on the increase (Kolb, Gorelik & Mugnaioli 2010). Factors Positively and Negatively Affecting the Operations Operations management is an important sector in the running of the airline. Singapore Airlines experiences various aspects, which affects the airline running positively and negatively. Employee employment, research, management, outsourcing and technology are some of the important aspects to consider (Wirtz, Heracleous & Pangarkar 2008). Involvement of Employees Strategic management in an organization involves employees. Operations management comes with ensuring that the managers, workers, executives and stakeholders contribute to the policies and procedures required for growth. Employees know the position of a business best, hence make valuable insights in its operations. The advantage of involving employees is dealing with issues affecting employees. The disadvantage of involving employees comes during decision-making. The process of decision-making is slow as it involves many people. Research Budgeting and financial planning require research. Operations in the airlines require research to run promptly. Research based on past performances places the organization at a better place as compared to that relating with performances of competitor organizations. The advantage of research in operations management lies in saving finances. Research on upcoming threats, opportunities, strengths and weaknesses gives the airline a better standing to deal with them once they occur. The disadvantage of research in operation is in expenses. It is expensive for the organization to perform research, especially if it does not directly apply to the organization. Management In the operations of the organization, management plays an important role in ensuring the implementation of strategic aspects. The airline management ensures communication to subordinates while facilitating the intended strategic goals. Management of employees comes with proper planning of resources through the year. The advantage of management in operations is in maintaining a proper layout of the organization’s activities. The disadvantage of management in operations is the allocation of resources. It becomes difficult to allocate resources in the organization. Outsourcing Outsourcing is the processes of offering well-equipped company part of the services. A company may outsource the marketing department of a country. For Singapore Airlines, outsourcing is an advantage to the organization in that it provides customers with proper services. The disadvantage of the outsourcing to the company is the difficulty it brings during decision- making. The airline has to work with the terms and conditions provided by the outsourcing company. Technology Technology plays an important role in ensuring the communication between the internal environment and the external environment. With technology, clients wishing to use the airline communicate through the internet to locate flights and customer care offices. Technology comes with the advantage of easier and fast communication. The disadvantage of technology is that it exposes sensitive information to the public and potential hackers. Conclusion Singapore Airlines remains one of the leading airlines in the aviation industry due to its flexible structure. The external environment remains a challenge, but also comes with opportunities to embrace. The importance of placing a Tariff and import quota on the amount of products available for import and export remains an important one for Thailand. Thailand requires an increase in the exporting services to the Philippines to compensate for other import quotas given by other countries. Import quotas operate with trade agreements set by the World Trade Organization (WTO) and the Asean Free Trade Agreement (AFTA) to protect the airline industry from the compensation of the high tariff. As the years go by, there is an increase in interaction through importing and exporting of services. Maintaining a negotiable state with the countries of export, Singapore must continue negotiations to ensure that the increase of the import quota to avoid it from losing its market share. The airline industry remains a competitive one and maintaining an edge over competitors remains a challenge. Singapore Airlines strives to ensure that their customers get the best services through research and strategic planning. Management and marketing plays an important role in maintaining the standards. Development of future strategies of the company lies with communicating with the company. References Becker, S & Baloff, N 1969, Organization Structure and Complex Problem Solving, Viewed January 18, 2012, Carol, B 2001, “HRM in the airline industry: Strategies and outcomes,” Personnel Review, vol. 30, 4, pp. 438-453. Cunningham, JB & Philip, G 2000, “Characteristics of well-performing organizations in Singapore,” Singapore Management Review, vol. 22, 1, pp. 35-64. Halbert, T & Ingulli, E 2011, Law & Ethics in the Business Environment, Cengage Learning, New York. . Hitt, MA, Miller, CC & Colella, A 2006, Organizational Behavior: A strategic approach, Wiley, New York. Hooper, PD & Greenall, A 2005, “Exploring the potential for environmental performance benchmarking in the airline sector,” Benchmarking, vol. 12, 2, p. 151. Kolb, U, Gorelik, TE & Mugnaioli, E 2010, Structural Characterization of Organics Using Manual and Automated Electron Diffraction, Taylor & Francis, New York. Nguyen, TK 2007, “Best Global Practices in Internal Organization,” Organizational Development Journal, pp. 50-72. Parsons, CC 2008, Business Administration, Gibb Press, New York. Perez, L J 2007, Type of Business Organization, Viewed June 19, 2012, Rainey, H G 2009, Understanding and Managing Public Organizations, John Wiley and Sons, New York. Schein, EH 2004, Organizational culture and leadership, John Wiley and Sons, New York. 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